Equity valuation: BMW AG

• Autor(a) principal: Bicho, José Miguel Furtado
• Data de Publicação: 2019
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10071/19543
• topic: BMW AG; Company valuation; Discounted cash flow; Multiples; Avaliação de empresas; Cash-flows descontados; Múltiplos

The main objective of this project is to evaluate the BMW AG. Therefore, the fair value of the company's shares is calculated in order to produce an investment recommendation of either holding, buying or selling stocks. Initially, an introduction and explanation of the business valuation methods used in this dissertation is provided. Supported by scientific articles, the literature review provides an excellent basis for the development and conclusion of the project. Based on the literature review developed, the methodologies selected to evaluate the company are the Discounted Cash Flow - Free Cash Flow to the Firm and the Relative Valuation (Multiples), since both methods use different perspectives and assumptions about the group, they complement each other. Secondly, after the valuation methods are elected, the industry in which BMW AG operates is presented in order to analyse the market and its main trends. Additionally, an analysis is made of the BMW Group and its business model in the different segments. At the end of the valuation, the decision using the DCF model is to buy since the price is above the market reference value (28-12-2018). Through the Multiples method, the share value is below the reference value in all three elected multiples, and the peer group median of the three multiples is lower than the values recorded by BMW AG, which indicates that the market places BMW above average, complementing the conclusion reached through the DCF method.